The Great Britain pound fell versus the euro and pared its earlier rally versus the US dollar today as unexpectedly poor Britain’s macroeconomic indicators reduced the appeal of the currency. The sterling managed to retain its gains against the Japanese yen.
The Nationwide House Price Index fell 0.4 percent in September. That is instead of the expected increase by 0.1 percent. Moreover, the previous rise was revised down from 1.3 percent to 1.1 percent. The Markit/CIPS UK Construction PMI was at 49.5, indicating decline, while analysts hoped it would be at the neutral 50.0 level.
The euro was the winner today because of hopes for a bailout for Spain, therefore it is not surprising that the sterling was down against that currency. The US dollar was weakened by talks about stimulus and the pound initially profited from that, but the domestic worries sapped strength of the UK currency, making it to retreat to the opening level. The speculation about an intervention from the Bank of Japan undermined the yen, allowing the pound to keep its gains versus the Japanese currency despite the poor fundamentals.
EUR/GBP was up from 0.7986 to 0.8005, the highest close since September 20, as of 22:48 GMT today. GBP/USD rose from 1.6129 to 1.6184, but retreated to the opening level later. GBP/JPY went up from 125.75 to 126.12.
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